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| Counting Your Shekels to Get to Market |
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 For many Israeli entrepreneurs, America remains the "golden medina" — the land of opportunity. With their sights firmly set on entering the U.S. market, many companies embark on an ambitious export program with the firm belief that just having the best product is an automatic guarantee of success.
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"Israeli entrepreneurs have, in the past, harbored the belief that 'if you build it, they will come'," notes Steve Rhodes, managing director, The Trendlines Group. "But having the best product doesn't necessarily mean that anyone at all is going to buy," he says.
"It's a tough market to penetrate, and you are competing with international manufacturers with established brand names, technological know-how, manufacturing capacity and marketing experience."
One of the biggest stumbling blocks to export remains a serious marketing plan supported by an adequate budget. "Many companies tailor their marketing plan to their desired budget — instead of figuring out what it's going to take to get the job done, and building a budget accordingly," says Rhodes.
But should small companies with limited budgets simply concentrate on the domestic market, or are there other alternatives available? One option is to engage a trading company to sell the product on your behalf. This approach has certain advantages and disadvantages: you have to be willing to give up some of your profit margin and you also have to compete with other products and services that might sell better than yours.
Like any salesman, the trading agent will focus on what's easiest to sell. If one product sells like hot cakes, while the other barely attracts attention, the salesman will soon tire of the slow-moving product, unless he is well trained and provided with high incentives.
 Another, more novel approach is to form partnerships with other small companies selling complementary, non-competitive products to the same market. The idea of the cooperative would be to jointly market and advertise its products: sharing the cost of producing the brochures, a website, tradeshow booth, or international representation. A collaborative effort would greatly reduce the cost to each individual business owner while presenting them with an effective forum for publicizing and marketing their products. Assuming a budget of $50,000 per company, a cooperative of four companies would have a combined marketing budget of $200,000, that due to resource sharing, will go much further than $50,000 spent four times by four companies.
However, there are pitfalls to this approach, which lie in the success of one or more members of the cooperative as opposed to the lack of success — or even failure — of other members in the partnership. "There's always the risk that some partners might feel that they paid for the other partners success. This issue needs to be addressed upfront," says Rhodes.
One example of an Israeli company that has successfully brought together a number of manufacturers under one umbrella is Trendlines' subsidiary, Holy Land Christmas. The company, which sells low-cost Christmas gifts to the mass market, reached $1 million in retail sales in its first year of operation. What couldn't be achieved by individual companies was achieved by a larger company with the marketing know-how and sufficient budget to penetrate the U.S. market.
Another Israeli success story is ZAG — the Israeli plastics company whose strength lies in marketing and product design. The company had the contacts in the marketplace enabling them to ask key buyers what the market was looking for and design products specifically geared to market needs. The company also brought in outside ideas and finally, due to overwhelming demand, entered the manufacturing realm themselves.
"While exporting is a major investment for any company, it can pay great dividends," says Rhodes. However, he cautions, "If you're not willing to spend enough money on your export activities, don't spend any at all."
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